French legal authorities have initiated an investigation into Binance, the world's leading cryptocurrency exchange, following accusations of money laundering, tax evasion, and drug trafficking.
Binance achieved regulatory approval in France in May 2022, operating as a registered Digital Asset Service Provider (DASP) under the guidance of the Autorité des Marchés Financiers (AMF).
Despite its formal registration, the platform now faces allegations of non-compliance with DASP requirements. This investigation could potentially culminate in criminal charges against the firm.
The accusations share similarities with earlier charges from the U.S. Department of Justice in 2023 against Binance and its former CEO, Changpeng Zhao (CZ). That particular case concluded with Binance paying an unprecedented $4 billion fine, leading to CZ's resignation.
Nevertheless, similar regulatory challenges are now surfacing in France, marking yet another significant obstacle for Binance in the regulatory sphere.
Local journalist Grégory Raymond reported, "The offences, occurring from 2019 to 2024, involve activities within France and the EU. Following user grievances about financial losses and deceptive information, the probe unveiled that Binance had not been registered or licensed by the AMF during the stated period. Additionally, Binance allegedly engaged in advertising through influencers without proper registration, breaching French regulations."
The exchange continually encounters numerous lawsuits and criminal allegations worldwide.
As of today, Binance transferred $20 million in BTC, ETH, and SOL to Wintermute. Critics argue Wintermute manipulates markets, using artificial liquidity to disadvantage retail investors.
Binance has previously faced similar criticisms for listing meme coins with low market capitalization.
In the United States, the Supreme Court has allowed a class-action lawsuit against Binance to continue. Former investors argue the company illegally sold unregistered tokens.
In another separate legal battle in the UK, former senior employee Amrita Srivastava has sued Binance, alleging wrongful termination. She claims her dismissal followed after exposing a colleague's attempt to solicit a bribe for preferential treatment. This lawsuit, filed last November, has further compounded the exchange's legal woes.
Overall, regulatory scrutiny of centralized exchanges is increasing. Just yesterday, KuCoin admitted operating as an unlicensed money transmitter in the U.S., and its founders, Chun Gan and Ke Tang, agreed to pay close to $300 million in fines, thereby avoiding imprisonment.
French authorities are yet to release further specifics about their investigation into Binance. However, the outlook remains challenging for the cryptocurrency giant.